FITSNews

The Other Big Debt(s)

The Other Big Debt(s)

RED INK RISING …

We write a lot about the national debt on this website. And with good reason. It’s obscene, people. Out of control.

Currently, government’s debt stands at nearly $20 trillion – and deficits (and interest on the debt) are both projected to explode in the coming years.

But government isn’t alone when it comes to creating massive quantities of red ink. Consumers are borrowing like crazy, too.

According to the latest Federal Reserve data, total revolving consumer credit (i.e. credit card debt) in America topped the $1 trillion mark in February – the first time that’s happened since 2007.

Add that to $1.4 trillion in student loan debt and more than $1 trillion in auto loan debt and … yeah … not good.

Total household debt at the end of 2016 totaled a whopping $12.6 trillion – an increase of $460 billion from the previous year. That was the largest increase in nearly a decade, and put this total just shy of its 2008 peak of $12.7 trillion.

The vast majority of that total, as expected, was mortgage debt – which totaled $8.5 trillion.

Consumer borrowing is not necessarily a bad thing. The expansion of credit fuels economic growth – so long as people can obtain (and keep) jobs that allow them to pay off their mortgages, car loans and credit card bills.